The Washington Nationals are heavily indebted, with $550 million, making them one of the most leveraged teams in Major League Baseball. Their financial struggles are evidenced by being the fourth lowest in revenue, which prompts them to seek additional income sources, such as selling stadium naming rights. These issues, compounded by the economic fallout from COVID-19, have left the team in a precarious financial position that raises concerns about their long-term viability and ability to manage debt sustainably.
Owning an MLB baseball team is like owning a mansion in a hot real estate market. You watch your valuation of your asset skyrocket - but nobody knows that you are mortgaged to the hilt.
If Ozanian's numbers are accurate, the Nationals are carrying approximately $550 million in debt. Ozanian also has the Nationals at the 4th lowest revenue of any team in baseball.
The Braves are publicly traded, and they reported last year an interest expense of $38.8 million. Ozanian has their debt at $248 million, but as you dig into the financials, they are carrying debt on their commercial real estate... That makes their effective interest rate around 6%.
Suffice it to say that while the Nationals might be a little over breakeven in operating income, when you get to EBIDA, how can you make money with those debt payments?
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